740.00112 PW/8–1044: Airgram
The Consul at Kweilin (Ringwalt) to the Secretary of State
[Received August 24—5 p.m.]
A–25. A responsible Chinese Army transportation officer long stationed in southern Kwangsi has confirmed to this Consulate reports obtained through more indirect sources that trade with the enemy from the West River area continues to flourish and has become a virtual monopoly of the Tai Li organization. Control is exercised through the Smuggling Prevention Bureau and the Goods Transportation Bureau, subordinate offices of the Ministry of Finance. Branches of these Bureaux are located in Kweilin, Liuchow and Wuchow, as well as in other places in Kwangtung and Kwangsi. Merchants report to these Bureaux and pay for protection and shipment [Page 139] of their merchandise, the fees charged varying with conditions at the time and governed by what the traffic will bear. Those merchants who are not properly recommended or who balk at paying the huge charges imposed find that their goods are subject to confiscation. Tai Li agents themselves sometimes enter the trade, disguising their activities through the use of names of private trading companies. Their main point of exchange is at Shap’ing, near Canton, where they keep in close touch with Japanese agents.
According to the Consulate’s informant, by far the largest items of export from southern Kwangsi are tung and wood oil, followed by wolfram, hemp, mercury, copper and silver. Hemp for export is now very much in demand, and farmers in southern Kwangsi are now cultivating it in substantial quantities.